Final answer:
Federalism today involves a balance of power between national governments and state or local bodies, handling different responsibilities. Fiscal Federalism is a key vehicle for the federal government to influence state policies. Future issues include economic disparity and environmental legislation, part of an ongoing evolution from dual to cooperative to competitive federalism.
Step-by-step explanation:
Modern Federalism and Its Challenges
Federalism today in nations like the United States, Canada, and Germany is characterized by a division of powers between the national and state or local governments. The U.S. Constitution, for example, specifies certain powers for the federal government, such as negotiating treaties, while states retain other powers including setting driving laws. Fiscal Federalism has become a significant aspect of modern federalism, where the federal government uses financial means, like taxation and grants, to influence state policies.
The challenges to federalism in the coming decade may include issues like economic inequality, environmental legislation, and homeland security. Federalism has evolved from dual to cooperative to new federalism, and now to a more competitive context where strategies like block grants and mandates are employed to manage intergovernmental relationships. However, pros and cons exist, including the creation of economic disparities among states and the difficulty to act on national issues due to the race-to-the-bottom dynamics.
As federalism continues to evolve, it’s essential to manage the balance between decentralization, where states maintain autonomy for regional distinctiveness, and centralization, where the federal government manages areas of national importance like defense and the economy. This evolution is also influenced by the multinational and multi-ethnic nature of many federations.